Scottish Franchising Contracts leap into the 21st century!

Article by Martin O'Neill

WJM

WJM lawyers have since the beginning of this millennium advised whichfranchise.com® readers on the differences between Scottish and English laws, and contracting procedures relating to franchising.

As part of this Scottish update we’d like to update you on a useful change to Scots law that came into effect during our most recent “Scottish summer”. It helps franchising parties and their lawyers move on from some clunky restrictions that had until now created some unwanted logistical problems when having documents signed and deals completed.

The snappily entitled “Legal Writings (Counterparts and Delivery) (Scotland) Act 2015”, means that relevant Scottish documents can generally now be validly executed and delivered in counterparts i.e. in two or more physically separate documents.

Until this change Franchise Agreements and related documents governed by Scots Law would normally only be lawfully executed if all parties had physically signed the same document. This led to some frustration, particularly where the parties were familiar with both the English and Scottish rules - the former providing that parties could happily complete transactions with counterpart signatures.

The new rules should signal the end of many “signing copies” of Scottish documents being carted up and down the hills of Scotland. They include provision for valid electronic delivery of documents. In these cases the parties should agree a method of acceptable electronic delivery, to make sure the delivery is valid.

If you want to take advantage of the new provisions then best practice is to include a “counterparts clause” to make clear the rules for signing and methods for delivery.

Whilst many commercial contracts can now be entered into by taking advantage of the new rules there are still exceptions, and caution should be exercised when using counterparts and electronic signing and delivery.

WJM’s franchising team operate from Glasgow, Edinburgh and Inverness and act for franchisees and franchisors based in Scotland and England.

To review the 2012 article on Scots law vs English law, please click here